4 May 2010

US airline merger to create world's largest carrier

7:08 am on 4 May 2010

Two of the biggest airlines in the United States - United and Continental - have confirmed they intend to merge to create the world's largest carrier.

The loss-making companies said they expected the deal, worth $US3.2 billion to deliver savings of more than $US1 billion a year.

The combined group will be named United Airlines but new branding will combine the current Continental colours with the United's name, the BBC reports.

Combined, United and Continental fly to 370 destinations worldwide, transporting 144 million passengers a year.

After the deal was announced shares of both firms rose in morning trading in New York.

Although United is seen as the dominant partner, the merger was described as a merger of equals.

Continental boss Jeff Smisek will be chief executive of the new company based in Chicago, while United Airlines' Glenn Tilton will serve as the non-executive chairman.